Public debt is reduced by 0.7% in July thanks to the State and the CCAA

2023-09-19 12:14:24

The debt of all public administrations fell 0.7% in July compared to the immediately previous month and stood at 1,558 billion euros. In June, the historical maximum of 1,568 billion euros had been reached, according to data published this Tuesday by the Bank of Spain. Despite this monthly decrease, the second that has occurred this year, the amount in absolute values ​​of public debt is the second highest in history. In one year, the debt of all public administrations has increased by 4.8%, which means that it has increased by 71,486 million euros compared to July of last year.

The monthly decrease in public debt registered in July is due to both the State and the autonomous communities, since both have reduced their debt by 0.5% and 0.4% respectively. Logically, as the State debt is much greater (1.39 billion in July) its contribution to the decline has been more relevant (6,557 million less) than that of the autonomies, which with a debt of 325,834 million euros in July have cut by 1,414 million. However, in one year, the State debt has increased by 6.3% and that of the communities has grown by 3.7%.

For its part, Social Security debt has remained stable in July, dropping just five million euros to 106,169 million euros; In the interannual rate it rises by 7% and remains at maximum levels. The Bank of Spain explains that the increase in Social Security debt in the last year is due to the loans granted by the State to the organization’s General Treasury to finance its budget imbalance.

In turn, city councils have registered a debt in July of 23,495 million euros, 1.2% less than the previous month, while in the last year it has increased by 1.7%. On the other hand, consolidation in the Public Administrations as a whole – that is, the debt held by the different subsectors that make up said sector – increased by 8.3% compared to the previous year, up to 330,000 million euros.

GDP Review

In this monthly preview, the Bank of Spain does not offer data on the weight of debt as a percentage of GDP, but rather offers it with the publication of the second quarter at the end of the month. According to the Stability Program presented by the Government in April, the forecast was that the public debt would stand at 111.9% of GDP this year and that it would drop from 110% of GDP in 2024 (109.1%).

But after the update this Monday by the National Institute of Statistics (INE) of the Gross Domestic Product (GDP) data for the years 2020, 2021 and 2022, the acting Government brings forward the objective of falling below 110% to 2023.

With the new data from the INE, the economy grew by 5.8% in 2022 (previously it was 5.5%), 6.4% in 2021 (instead of the previous 5.5%) and in 2020 the economic contraction due to the pandemic was 11.2%, one tenth less than previously estimated.